Business owners have many different kinds of responsibilities under the federal, state, and local laws. In fact, as a business owner, you may not even be aware of some of your legal responsibilities. For this reason, one important responsibility is to always consult with an attorney who is familiar with laws and business obligations in your area to ensure you are in full legal compliance. The following are some addition legal responsibilities that California business owners have.
Licenses, permits, and registration
You must always ensure that you or your business has obtained all of the required licenses and/or permits by California. The exact licenses and permits necessary depend on your type of business, and an attorney can help identify these for you. Most businesses, from bakeries to car washes to beauty salons, require several permits or licenses to comply with local and state laws.
All business owners must comply with all relevant tax laws set out by the IRS. The way you pay taxes will often depend on your business entity, so you should always make sure you are filing your taxes in the correct manner. For example, if your business is registered as a limited liability company (LLC), is a partnership, or is a sole proprietorship, you will have to report your business earnings on your personal tax returns. If you run a corporation, the business itself will have to pay taxes on profits. An attorney who specializes in small businesses can help guide you through the proper tax filing process for you. If you have employees, you must also ensure you are correctly withholding payroll taxes on the local, state, and federal level. You may also have to withhold amounts for Social Security and Medicare (FICA), as well as disability insurance as required by California.
Speaking of employees, any business that employs workers has the responsibility to follow a number of labor-related laws. First, you should always know how to properly classify a worker as an employee or an independent contractor. Some business owners think they may not have to comply with taxes or certain labor laws if they simply treat and pay workers as independent contractors. However, both the Fair Labor Standards Act and California labor laws have a strict test for independent contractors, examining factors such as who decides hours, payments, and who has control over other aspects of the work. If you misclassify a worker as an independent contractor, you may be facing legal liability if that worker later challenges their classification in court. For all workers classified as employees, you must follow a variety of laws regarding hours worked, minimum wage and overtime payments (FLSA), anti-discrimination and harassment (Title VII), safe working conditions (OSHA), family and medical leave (FMLA), health benefits (ACA), and much more. The specific laws that apply depend on the size of your workforce, though some labor and employment laws apply to businesses with even one employee. Failing to comply with an employee-related law can land you in legal trouble not only with that employee, but also with California’s Department of Industrial Relations (DIR) or the Department of Fair Employment and Housing (DFEH), as well as federal agencies such as the Equal Employment Opportunity Commission (EEOC).
All business owners have a duty to keep their premises free from potentially dangerous conditions in order to keep customers and visitors safe. Many accidents may happen on your business property, such as slip and fall accidents, falling objects, and more. If you fail to keep the premises up to code or fail to regularly inspect and maintain your premises and someone gets injured, you may face significant legal liability.
If you manufacture or sell products, you must ensure that these products are safe for their intended use. This includes making sure a product is safely designed, safely assembled, and that it includes any warnings of potential hazards that may not be readily identifiable to a consumer. You also must be familiar with the laws involving warranties and other customer guarantees. If a customer is injured by a defective product that you made or sold, you may be held liable for their injuries. The above are only some of the many legal responsibilities a business owner may have. As you can see, there are many laws that may apply to a business owner, and violations of these laws can lead to costly investigations and proceedings, government penalties, or civil judgments. An experienced lawyer can always assist you in identifying all of your obligations and making you comply with all applicable laws to avoid any legal challenges in the future.